The Conservatives are claiming that, based upon figures they have obtained from the Office of National Statistics, one million fewer workers are members of employer pension schemes than ten years ago.  Their argument is that this is due to the present Governments policies, principally the removal of a pension funds ability to reclaim the tax credit on dividend payments.

The Tories are, of course, out to make political capital and this is by no means a recent trend but there is a serious point here.  Employer sponsored pension schemes were, and still are, a valuable source of retirement income and many years of, supposedly, supportive Government policy have done nothing to halt their decline.  My own view is that no cause and effect has been proven between removal of the tax relief and reducing membership (or, perhaps, more accurately, availability) of these schemes, more of a problem has been the increasing protection afforded to members.

Final Salary Schemes now afford statutory protection to their members, meaning that their benefits are, in effect, underwritten by taxpayers.  There is a bit more to it than that but that is the gist.  Protection, of course, comes at a price and it seems that the price for most of us is no scheme.  The dwindling band of final salary scheme members sail off into the sunset secure in the knowledge that the rest of us are guaranteeing their future whilst we of the less fortunate majority are left to rue our loss.  It is a shame that we are turning into a nation of haves and have nots when it comes to pensions and another example of the unforeseen consequences of well meaning responses by politicians to call to ‘do something’.